Status of the Nation's Highways, Bridges, and Transit:
2002 Conditions and Performance Report
Part I: Description of Current System
Part II: Investment Performance Analyses
Part III: Bridges
Part IV: Special Topics
Part V: Supplemental Analyses of System Components
The usefulness of any investment requirements analysis depends on the validity of the underlying assumptions used to develop the analysis. Since there may be a range of appropriate values
for several of the model parameters used in
these analyses, this report includes an analysis
of the sensitivity of the estimated Cost to
Maintain Highways and Bridges and Cost to Improve Highways and Bridges to changes in
Value of TimeThe value of time in HERS was developed using a standard methodology adopted by the Department, but other values are used inside and outside the Federal government. Doubling the value of time would increase the Cost to Improve by 11.7 percent. Cutting it in half would reduce the Cost to Improve by 8.1 percent.
Construction CostsIf currently unforeseen circumstances were to cause future highway construction costs to unexpectedly rise by 25 percent in constant dollar terms, this would increase the Cost to Improve by 16.1 percent. The increased cost of individual projects would be partially offset in this scenario by some projects that would no longer be cost-beneficial.
Note: The impacts of alternative model parameters and procedures are more ambiguous for the Cost to Maintain, as many of these parameters are used in the calculation of baseline user costs. By changing these parameters, the target user cost level being maintained under the scenario is also changed.
This chapter examines the sensitivity of projected transit investment requirements
to variations in the values of the following exogenously determined model
inputs: passenger miles traveled (PMT), capital costs, and the value of
time. These alternative projections illustrate how transit requirements
will vary according to different assumptions on these input values.
Sensitivity to a 25 Percent Increase in Capital CostsA 25 percent increase in costs increases the amount necessary to Maintain Conditions and Performance and to Improve Conditions and Performance by close to the full 25 percent. Total benefits continue to exceed total costs for most investments even this 25 percent increase.
Sensitivity to a Change in the Value of TimeThe value of time is used to estimate the total benefits to transit users from transit investments that reduce passenger travel time. Variations in the value of time were found to have a limited effect on investment.